Densmore Blog

The Knowledge Gap

On March 22, 2017

Every year, candidates about to attend Capstone 2 tell me the same thing: they don’t know any technical. Really? By this point in the process, you will have passed both the two Core and the two Elective modules. These exams require demonstration of in-depth technical knowledge to pass them. So, let’s be honest. The problem is not a lack of technical knowledge, the problem is that you haven’t learned to apply this technical knowledge.

The perception is that in time-constrained, CFE-level cases, candidates assume that they scored Nominal Competence because they “don’t know any technical.” The reality is that most of these candidates knew the technical, but had no clue how to tie the technical to the case facts, which is what is required to demonstrate competence.

For those of you who have completed the module exams, you should be using this time before the start of Capstone 1 in May to “review” your technical knowledge. Reviewing technical for the CFE is different from learning technical for objective-format questions. The focus is different. You need to get an understanding of what the relevant decisions variables are for a topic. You also need to understand how to use case facts effectively. This is the basis I use to develop scenario flowcharts for commonly tested topics.

Let me take you through an example to demonstrate how to do this:

Government assistance

1. Identify

· Triggers – government funding/grant already received or to be received, may be recorded as revenue on I/S

o Accounted for in period in which conditions arise that will cause it to be repayable (prospectively)

4. Conclude

· Definitive recommendation on appropriate treatment

· Quantify impact (B/S, I/S)

So instead of just memorizing the standard, break it down into the POSSIBLE decision variables. When you write this issue in a case, use the case facts given to decide what the RELEVANT decision variables are to analyze. This process will train your brain to think in terms of developing depth in your response, not just regurgitating technical knowledge.